SAICO profits jumped 137% in Q1 to SR10 million‎

Saudi Arabian Cooperative Insurance Company revealed an increase in net profit before zakat during the first quarter to 10 million riyals, compared to 4.2 million riyals in the same quarter of last year, by 137%. This came after today’s announcement of the preliminary financial results for the period ending in 2023- 03-31 (three months).

Total written premiums (GWP) in the first quarter amounted to 464.7 million riyals, compared to 424.9 million riyals in the same quarter of the previous year, an increase of 9.3%.

The total shareholders’ equity “without minority rights” in the current period amounted to 242.7 million riyals, compared to 294 million riyals in the same period last year, a decline of 17.4%.

Earnings per share in the current period reached 0.27 riyals, compared to 0.07 riyals in the same period last year.

The company applied International Financial Reporting Standard 17 (Insurance Contracts) and International Financial Reporting Standard 9 (Financial Instruments), in accordance with the standards approved in the Kingdom of Saudi Arabia, as of January 1, 2023 and with retrospective effect, which led to a fundamental change in presenting the financial results of all Periods starting from the first quarter of 2023 and re-measurement of similar periods from previous years according to the new standards. As a result, the company announced the financial results according to the data available under IFRS 17 and IFRS 9, and the data that did not comply with the new standards was indicated by the number “0”.

The following detailed explanation covers the financial statements announced above and the updated financial statements attached to this announcement, which are consistent with the way financial results are presented in accordance with the new standards:

The reason for the increase in net profit before zakat and income tax for the current quarter by SAR 6,609,416 compared to the same quarter of the previous year, an increase of 156%, is due to the following main reasons:

An improvement in the results of insurance services by 11,472,367 Saudi riyals compared to the same quarter of the previous year, this was driven by an increase in insurance services revenues by 58,647,650 Saudi riyals, an increase of 30%, in addition to a decrease in net expenses from reinsurance contracts held In the amount of SAR 100,286,304, a decrease of 81% compared to the same quarter of the previous year. These changes were offset by an increase in insurance services expenses by 147,461,587 Saudi riyals, an increase of 175% compared to the same quarter of the previous year.

This is partly offset by some not positive changes as shown below:

A decrease in net investment income by SAR 10,735,386 compared to the same quarter of the previous year, a decrease of 67%.

An increase in other net operating expenses by SAR 1,401,955 compared to the same quarter of the previous year, an increase of 68%.

The company also applied IFRS 17 (Insurance Contracts) and IFRS 9 (Financial Instruments), according to the standards adopted in the Kingdom of Saudi Arabia, as of January 1, 2023 and retroactively, which led to a radical change in the presentation of financial results for all periods starting from the first quarter of 2023 and re-measuring similar periods from previous years according to the new standards. As a result, the company announced the financial results according to the data available under IFRS 17 and IFRS 9, and the data that is not compatible with the new standards was indicated by the number “0”.

The financial results for the previous quarter were announced in accordance with the previous standards, International Financial Reporting Standard 4 and International Accounting Standard 39, and the company did not disclose the balances for the relevant period in accordance with the requirements of the new standards in the financial statements for the current quarter. Therefore, the changes between the current quarter and the previous quarter were not explained due to the inconsistency of the financial standards between the two periods.